Vol. 402 No. 8
19 Mr. Rabbitte asked the Minister for Labour if, in relation to his statements (details supplied), the Government intend to take any steps to ensure that the private sector will do more to invest their profits at home and thus create additional jobs; and if he will make a statement on the matter.
Since I made the comments referred to in the question the preliminary estimates of the labour force at mid-April 1990 have been announced. The estimates show an increase of 30,000 in the number at work and a fall of 19,000 in the number unemployed as compared with the 1989 estimates. Employment in industry has increased by 16,000 and, in the private services sector by 15,000. There was a decline of 3,000 in the public sector.
These employment increases are attributable largely to the Programme for National Recovery negotiated in October 1987 and the increased investment accompanying the programme. Despite these favourable trends, there are certain features of the present situation which are a source of concern. Unemployment at 218,000 is still at an unacceptably high level. Future expectations are for an annual labour force increase of about 25,000.
While emigration declined by 15,000 in the year ended mid-April 1990, the figure of 31,000 is unacceptably high. Too many of our talented and highly qualified young people are opting for employment abroad. Irish companies will have to improve their recruitment practices if they are to attract and retain graduates from third level education. There also seems to be a reluctance among some employers to recruit people from the live register.
As regards the future, economic and employment growth will continue to be influenced by developments abroad. The global economic outlook is now less promising than earlier in the year due to the impact of higher oil prices, the instability generated by the Gulf crisis, the decline in the UK and US economies and the uncertainties occasioned by German reunification. As a result, there are some indications of a slowdown in domestic growth since mid-year.
Against the background that I have outlined it is obvious that our job creation efforts will have to remain at a high level of intensity if we are to make further progress in reducing unemployment and emigration. Action in this area requires the full co-operation of all interests but especially the social partners.
We must develop a strong internationally competitive economy geared to maximising employment growth. This involves a coherent strategy spanning industrial, agricultural, labour market and other relevant policy areas. Particular emphasis has to be placed on indigenous industry, mainly comprising small and medium-sized businesses, together with the continued attraction of overseas investment to facilitate technology transfer as well as expanding employment.
We have to bear in mind that there are almost 1,000 overseas firms operating here employing 90,000 workers representing 40 per cent of the industrial workforce. We need overseas investment in manufacturing and internationally traded services but we have to deepen the linkages of overseas firms in the domestic economy.
The Government's concern is to continue to provide an environment conducive to the expansion of business and employment. This is the approach that has influenced the Government's stance in the negotiations on a programme of economic and social development. Employment and job creation are featuring prominently in these discussions.
I have complimented the Minister before in the House for choosing, on one or two occasions, to speak out, to criticise the performance of some of the leading private sector companies in terms of job creation. Would he not agree that it is unrealistic to talk about significant additional job creation from reinvestment of profits while circumstances obtain here in which almost £3 billion are being repatriated in profits by the 1,000 companies to which he referred? I want the Minister to accept that I am not arguing that it is not possible to prevent the repatriation of profits. Does he agree that these represent the life-blood of our economy being allowed to drain away and, because of that the spectre he raises of this investment going to Eastern or Central Europe is all the more probable? Will he indicate whether there is any attempt being made by the economic Ministries to tackle this question through the taxation system or whatever?
This matter is being tackled in a number of ways. While acknowledging the Deputy's remarks I have spelled out several times that it is reinvestment of profits and resources that will create employment. In the first two years of the Programme for National Recovery there were very few indications of such spin-off in terms of jobs. I have given statistics on a number of occasions about the capacity utilisation within our economy which did not appear to rise as did our GNP, in that we did not appear to be gaining many job increases. That trend appears to be changing, however slowly.
As I said in my reply, there are at present over 200,000 people unemployed. However, I acknowledge that some industries will do almost anything rather than create employment. For example, they will operate on the basis of using whatever capacity they have within their existing workforce—often to the benefit of that workforce—by way of double days, long sessions at weekends and overtime, thus not generating additional employment. We must continue to work to resolve that problem. I might add that the Departments of Finance, Industry and Commerce and a number of others are endeavouring to expand the level of employment in our economy.
Does the Minister not think it is imperative that action be taken when £3 billion are being repatriated in profits, representing roughly the equivalent of the amount of money secured by way of Structural Funds in preparation for 1992? In that context—whether by way of a revision of the system of grant aids to industry or an incentive within the tax system—would he agree that we should cause such companies to reinvest some portion of those profits here where they are generated? Furthermore, would he agree that, otherwise, we will not see any significant boost on the part of these companies in terms of job creation?
That is the drive that must be undertaken continuously, to endeavour to get those people who generate profits in the manufacturing services sector of our economy, to put some of those profits back into the generation of employment. There are some indications that that trend is improving, which has been shown in the labour force survey undertaken this year. Nonetheless, there are other companies which have not yet got the message. Therefore, that drive by State industries and Government must be continued in an effort to get those people to generate investment in jobs.
That disposes of questions for today.
